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How the Code for the Tendering and Performance of Building Work 2016 has reshaped industrial relations in the building and construction industry

Since the inception of the Code 2016 and the resurgence of the Australian Building and Construction Commission (ABCC), industrial relations in the Building and construction industry have been the site of significant works.

The Code 2016

One of the major developments of the Code 2016 was the reduction in the transitional buffer period for building companies with enterprise bargaining agreements (EBA) containing prohibited provisions to be eligible to tender for federally funded building and construction projects.

The Code prohibits the use of unfair and discriminatory clauses in EBAs. Under section 11 of the Code 2016, building companies to which the Code applies must not be covered by an EBA in respect of building work which includes clauses that:

  • Impose limits on the rights of the building company to manage its business or to improve productivity;
  • Discriminate, or have the effect of discriminating against certain persons, classes of employees or subcontractors;
  • Are inconsistent with the freedom of association requirements set out in the Code.[1](These requirements were examined by Morrissey Law & Advisory in our February article on the Code 2016.)

The period in which building companies remained eligible to tender for federal government projects whilst being covered by a prohibited EBA was cut from 2 years to just 9 months.

This means companies covered by a prohibited EBA, except those to which a transitional exemption applies, have been ineligible to tender for and be awarded federal government projects to which the Code 2016 applies since 1 September 2017.

What should builders and contractors do to ensure compliance with the Code?

In order to avoid lengthy investigations, or worse yet, expensive litigations, the best method of ensuring compliance with the code is to engage an experienced legal practitioner to review and amend the EBAs under which workers are employed.

A proactive approach to compliance involves reviewing the specific provisions of such EBAs and avoiding the inclusion of prohibited conduct, arrangements and practices under section 11 of the Code 2016.

Enforcement efforts of the ABCC[2]

The Code 2016 was not the only important step taken by the government around workplace conditions, as the ABCC stepped up its enforcement efforts considerably. According to the Annual report 2016-17, the Commission:

  • Assessed 2,637 enterprise agreements and individual clauses for compliance;
  • Commenced 142 new investigations into suspected contraventions of workplace laws.
  • Finalised 28 matters before the courts, which resulted in penalties awarded totalling over $2.1 million.
  • Awarded $9.7 million in penalties against the CFMEU and representatives in cases brought by the ABCC and its predecessors.
  • Imposed the first ever exclusion issued under the Code, making a national building company ineligible to tender for federally funded projects for a 3 month period.

It is clear the ABCC has no intention of allowing contraventions of the Code to go unattended.

What to watch for going forward in 2018

As can be seen from the stringent enforcement procedures of the ABCC, the importance of employers understanding their obligations under the Code 2016 is undeniable. It is vital for building companies that are planning on tendering for federal government projects to understand the powers and procedures available to the ABCC with regard to investigation and enforcement.

If you have any questions regarding eligibility to tender for federal government construction projects, compliance of enterprise agreements with respect to the Code 2016 or the transitional exemptions, please contact Morrissey law & Advisory.

This article was prepared by Patrick Ireland and Michael Morrissey.

[1] Code for the Tendering and Performance of Building Work 2016 s11 https://www.legislation.gov.au/Details/F2017C00668

[2] ABCC, Annual Report 2016-17, 27 September 2017 https://www.abcc.gov.au/sites/g/files/net2406/f/abcc_annual_report_2016-17.pdf

Disclaimer: This publication by Morrissey Law & Advisory is for general information and commentary only and should not be considered or relied upon as legal advice. Formal legal advice should be sought in relation to any matters or transactions that may arise in relation with communication.

2018-07-31T12:50:54+00:00 March 21st, 2018|Commercial & Corporate Advisory, Construction Law|